October 1, 2012
The Fresh Healthy Vending franchise disclosure document used to sell hundreds of franchises nationwide is “materially deficient,” according to a consent order issued by the Washington State Department of Financial Institutions, Security Division.
Fresh Healthy Vending failed to disclose that its predecessor is YoNaturals.
Fresh Healthy Vending failed to disclose that Mark Trotter and Nicholas Yates actively hold franchise management positions with the company.
Fresh Healthy Vending failed to disclose that Mark Trotter and Nicholas Yates and their partners were previously fined $10 million and $3.5 million respectively in unrelated fraud cases.
Washington State has issued a Consent Order (see below) requiring Fresh Healthy Vending to come clean in regards to its ties to Trotter and Yates.
Mark Trotter owns all preferred shares of FHV (Fresh Healthy Vending)
According to the WA Consent Order, “Mark Trotter (“Trotter”), a California resident, is the president, secretary, and sole shareholder of FHVHC, which holds all preferred shares of FHV. FHV consults Trotter before selling FHV vending machine franchises.”
The Consent order states that since Trotter manages franchise sales, Fresh Healthy Vending must disclose his relevant litigation history:
Trotter’s relevant litigation history includes his being the subject of an action involving the alleged violation of the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, and the Texas Electronic Mail Solicitation Act, and the Deceptive Trade Practices-Consumer Protection Act in connection with sending unsolicited e-mail messages containing false, misleading, or deceptive information. On June 6, 2006, the US District Court for the Western District of Texas entered a Final Judgment and Order for Permanent Injunction and Monetary Relief against Mark Trotter.
Nick Yates has sales and operations oversight at FHV (Fresh Healthy Vending)
According to the Consent Order, both Trotter and Yates have management responsibility over franchise operations and sales. Nick Yates should have be fully disclosed in the Fresh Healthy Vending FDD, along with his relevant litigation history:
Yates’ relevant litigation history includes a February 2006 judgment involving a monetary penalty that was entered against him by the Federal Court of Australia for misleading and deceptive conduct regarding the operation of pre-paid phone card and vending machine distributorships.
Fresh Healthy Vending concealed its true ownership & management
In 2008 – 2010, numerous negative comments appeared on such websites as Ripoff Report and ComplaintsBoard warning would-be investors to steer clear of the YoNaturals vending opportunity because of its connection to Trotter and Yates.
It appears that YoNaturals changed its name to Fresh Healthy Vending and installed Jolly Backer as the new owner. Jolly Backer and then-Sales Director Chris Wyland claimed that Trotter & Yates no longer had any connection to the company.
According to the WA Consent Order, Fresh Healthy Vending represented to at least one Washington franchisee that Backer bought YoNaturals, that FHV had taken over YoNaturals’ franchisees, and that Yates and Trotter were not involved with FHV.
In a conference call with FHV, Jolly Backer and Chris Wyland (now CEO of Sprout Healthy Vending) assured the Administrator of UnhappyFranchisee.Com that Yates and Trotter had no ownership of management role with the company.
In February, 2011, a prospective franchisee of Fresh Healthy Vending allegedly met with FHV Sales Director Chris Wyland, who assured them that Mark Trotter and Nick Yates had no relationship with the company. The franchisee prospect reports that after the meeting, Wyland accidentally sent the franchise prospect an email update intended for Nick Yates (see below).
After catching Wyland in the obvious lie, the franchise prospect declined to move forward with Fresh Healthy Vending.
Read the Consent Order here: Fresh Healthy Vending – WA Consent Order (PDF)
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September 3, 2012
Healthy vending franchise companies seem to be going to great lengths to hide the past activities of their top management and shareholders.
And for good reason.
HUMAN Healthy Vending, it seems, would rather you didn’t know that its Vice President of Sales Bill Wotochek is former President of Revive Franchising, LLC, a company that abandoned its franchise owners and left their businesses to rot, wither and die, and was Senior Director of Business Development of a company charged with fraud by the Federal Trade Commission.
YoNaturals, it seems, would rather you didn’t know that it is owned by convicted spammer Mark Trotter and is associated with convicted Australian vending and phone card scammer Nicholas “Nick” Yates.
Fresh Healthy Vending, it seems, went to great lengths to make everyone think it was owned solely by businessman Jolly Backer, but its preferred stock is actually owned by the same company that owns YoNaturals, run by the aforementioned & infamous Mark Trotter and Nick Yates.
Bill Wotochek, Vice President of Sales, HUMAN Healthy Vending
In a recent post (HUMAN Healthy Vending: the Next Revive Energy Mints Scam?), we posted excerpts from the HUMAN Healthy Vending Franchise Disclosure Document (FDD) that HUMAN is providing to prospective franchisees and is providing to franchise registration and filing states.
In the sworn and signed documents, HUMAN Healthy Vending fails to disclose its Vice President of Sales Bill Wotochek’s key role in the Revive Energy Mints travesty by saying that Mr. Wotochek only “was a sales representative for Sito Marketing, Inc. from January 2008 through July 2011.”
Sito Marketing LLC (not Inc.) was an affiliated company that marketed the Revive Energy Mints distributor opportunity.
Revive Franchising LLC sold the Revive Energy Mints franchise opportunity.
Bill Wotochek was certainly much more than a “sales representative”; he was Vice President of Sito Marketing and President of Revive Franchising LLC.
The Revive Franchising 2011 Franchise Disclosure Document stated:
- In September, 2008, Mr. Wotochek was hired to work in business development with Sito Marketing, LLC, our affiliate, in Denver.
- In January, 2009, Mr. Wotochek was promoted to Vice President of Expansion for Sito Marketing, LLC.
- In October 2010, Mr. Wotochek was promoted to President of Revive Franchising, LLC.
Right around the time Mr. Wotochek left Revive Franchising, LLC, in summer, 2011, Revive distributors could no longer reorder products, nor receive critical support they had paid for.
Read the sad accounts of Revive’s hard-sell tactics and subsequent abandonment here: Revive Energy Mints Posts.
HUMAN Healthy Vending: Not so Squeaky Clean?
HUMAN Healthy Vending, which claims to be an altruistic company, also fails to disclose that from 2007 to 2008, Mr. Wotochek worked at the Dalbey Educational Institute, LLLP, as Senior Director of Business Development.
Dalbey Educational Institute, LLLP ran an infomercial scam called “Winning in the Cash Flow Business,” that misled consumers to believe they could get rich quick by dealing seller-financed promissory notes or cash flow notes.
According to the Federal Trade Commission, only 0.8 percent of consumer who purchased less than $500 of the Dalbey Education Institute’s products ever sold a promissory note, and only 2.8 percent of consumers who paid $500 or more for Dalbey Education Institute products ever sold a promissory note.
After lawsuits and injunctions from the Colorado Attorney General and the Federal Trade Commission, Dalbey Educational Institute, LLLP ceased operation and declared bankruptcy.
HUMAN Healthy Vending Response Invited
UnhappyFranchisee.Com invites HUMAN Healthy Vending to provide clarification, corrections or a rebuttal to our opinion and conjecture that they are intentionally misrepresenting Mr. Wotochek’s background.
HEALTHY VENDING Franchise Companies Hide Unhealthy Pasts Part 2 (YoNaturals)
HEALTHY VENDING Franchise Companies Hide Unhealthy Pasts Part 3 (Fresh Healthy Vending)
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September 24, 2010
Despite a recession that has continued to drag on for over 3 years, Fresh Healthy Vending has managed to maintain continued growth. The vending franchiser reports that it has signed 12 new franchisees for the month of August, rapid growth for a company whose business model launched in early June. Fresh Vending press release, Sept. 14, 2010
Brand new franchisor Fresh Healthy Vending has issued a press release promoting its vending franchise opportunity, which gives potential franchisees the opportunity to own and operate healthy food vending machines in schools and hospitals.
One must marvel at the chutzpah of a company that boasts that, despite a 3-year recession, it has managed to “maintain continued growth” for a whopping two months.
He’s a Pinball Wizard… There has to be a twist…
Despite the fact that Fresh Vending CEO Jolly S. Backer, who was a pinball machine salesman up until January, 2010, appears to have zero organic food retailing or franchise experience, the company has picked up the tricks of franchise sales doubletalk quite quickly. The company press release is a goldmine of logical fallacy, misdirection and sleight-of-hand.
After the opening line (above), it continues:
The growth has been buoyed along by impending changes in school nutrition requirements nationwide due to the Healthy Hunger Free Kids Act of 2010 which is expected to be passed into law by the end of this month.
The growth has been “buoyed” by “impending changes” that may or not be passed? Since the growth they refer to is from franchise sales, not product sales, they are right: they’ve used possible future legislation to close deals. It continues:
That puts Fresh Healthy Vending among a short list of companies that have proven to be recession-resistant by sustaining growth despite the economic downturn.
How does the fact that they’ve somehow induced 12 individuals to invest in a high-risk, unproven vending franchise prove that Fresh Healthy Vending is “recession-resistant”?
Behold the old franchise sales trick: Claim that your success in selling the franchise opportunity equates to success at the consumer level. That is, the fact that people are buying the franchise somehow also means that kids are buying healthy, organic food from vending machines.
The press release then cites statistics about childhood obesity and how Fresh Healthy Vending is benefitting by providing kids with access to healthy foods. How, exactly, is Healthy Vending benefitting when they’ve only operated since June, during summer months when schools aren’t in session? And isn’t the reason that there’s a childhood obesity problem is that kids don’t eat healthy, organic food, much less healthy, organic food from a vending machine?
Fresh Healthy Vending claims you can feel comfortable investing $30,000 – $120,000 in a 2-month-old experimental franchise concept with little-or-no relevant track record because it sold 12 franchises in its first two months. Fresh Healthy Vending wants you to believe that having sold 12 franchises in two months is proof that its concept is “recession-resistant” and that it has a track record of maintaining “continued growth.”
With all due respect to Mr. Backer, our TILT sign is flashing.
We look forward to following the “impending” success stories of these initial 12 franchisees, and invite Jolly Backer and his jolly franchise sales crew to disprove our fears that this is the latest in a long tradition of money-losing (at least for the franchisees/distributors) vending opportunities.
In any event, thanks Fresh Healthy Vending for the wonderful press release and a good laugh. Thanks also for the reassurance that, as long as vending companies offer franchise & business opportunities, UnhappyFranchisee.com will never run out of material or unhappy franchisees.
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elated Reading: FRESH HEALTHY VENDING Awarded Franchise Chutzpah Award
September 24, 2010
The award was granted for its press release (below) in which Fresh Healthy Vending claims that it’s 2-month old, unproven concept has “managed to maintain continued growth” and has “proven to be recession-resistant by sustaining growth despite the economic downturn.”
Interestingly, the two-month period of growth referred to by the school-based vending concept occured when school was not in session.
An earlier Fresh Vending press release was also chutzpah-notable. It’s headline reads “Fresh Healthy Vending Franchisee to Launch Throughout Scottsdale Schools.” The body of the release reveals that “throughout Scottsdale schools” actually means 3 small private schools with a few hundred students each.
We’re glad to see a new franchisor who does not let the truth get in the way of bold, misleading claims.
Read our commentary and discussion here: FRESH HEALTHY VENDING: Fresh Twist on Old Concept?
Here’s the award-winning Fresh Vending company press release:
“Fresh Healthy Vending Franchise Announces Rapid Growth Moving Into 4Q 2010
“SAN DIEGO, Sept. 14, 2010 // GLOBE NEWSWIRE // — Despite a recession that has continued to drag on for over 3 years, Fresh Healthy Vending has managed to maintain continued growth. The vending franchiser reports that it has signed 12 new franchisees for the month of August, rapid growth for a company whose business model launched in early June. The growth has been buoyed along by impending changes in school nutrition requirements nationwide due to the Healthy Hunger Free Kids Act of 2010 which is expected to be passed into law by the end of this month. That puts Fresh Healthy Vending among a short list of companies that have proven to be recession-resistant by sustaining growth despite the economic downturn.
“The healthy foods market in general has proven to be more resilient than traditional foods throughout the recession, sustaining a higher growth rate and continuing to grab more and more market share from traditional foods. According to a report by the Nutrition Business journal, “As growth takes meaningful hold, healthy foods should increase its share of the total foods market, reaching 23 percent penetration by 2017. The trends toward natural and organic food and beverages as safer and healthier consumer choices remain particularly strong.” Foods in the natural and organic categories are expected to grow the fastest in the next eight years. The organic category is expected to grow nearly 10% in 2012. Carla Ooyen, research manager for the Journal capped it off by saying: “Food is big business, and healthy foods are the future of that business.”
“Fresh Healthy Vending in particular has benefitted from the sustained growth of these markets. Since the company’s Fresh Vending machines specialize in natural, organic and healthy products, they are an obvious beneficiary of the particular strength that organic and natural products have enjoyed despite the ailing economy. Another major factor in the company’s ongoing success has been the climate of concern surrounding the issue of childhood obesity and the related scrutiny that school nutrition has been subject to. With schools eager to show their support for and compliance with government programs such as Michelle Obama’s “Let’s Move!” initiative against childhood obesity and the Healthy Hunger-Free Kids Act of 2010, the company has had no shortage of demand for the new machines.
“Commenting on the environment of demand for healthy vending in schools, Jolly Backer, CEO of Fresh Vending said:
“’Principals are telling me that this year is the first time that they have ever had parents calling in and asking what kinds of food they stock in their vending machines. It’s been such an issue in the news, ‘junk food vending in schools.’ It’s nice when locations where our machines are placed are able to tell them that yes, we have a vending machine and no, there is no junk food in it. Our machines only stock natural and organic products. It’s great.’
“About Fresh Healthy Vending:
“Fresh Healthy Vending is the leading healthy vending company in the U.S. and the only vending company that offers 100% juices, fresh vegetables and fruits, smoothies, and yogurts in every one of its healthy vending machines. Under the leadership of CEO Jolly S. Backer, Fresh Healthy Vending is positioned for growth and continued success in the automatic retail market.
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